Tag Archives: investment
UK house prices up 1.8% in second quarter of 2016, but stagnant in London
UK house prices increased by 1.8% during the second quarter of 2016 and were up 8.5% compared to the same period a year earlier, according to the latest quarterly index data. This took the typical price of a standardised UK property to a record of £215,582 from £211,868 in the first quarter of 2016, the Halifax House Price Index administered by market shows. The data also shows that London house prices have increased more than double the UK average and nearly four times greater than in Northern Ireland despite stagnating in the second quarter of the year while prices in Scotland and Wales fell. Also, the annual increase of 8.5% during the second quarter was the lowest recorded since the third quarter of 2015 but house prices have now risen on a quarterly basis for 15 successive quarters, and prices are also up some 36.6% since the height of the financial crisis in the spring of 2009. But overall, considerable regional variations in terms of both house price inflation and standard house price levels continued into the second quarter of 2016. London, followed by the South East, remain by far the most expensive areas to purchase housing, with the average house price in the capital currently pushing close to £450,000. With the lowest prices in Northern Ireland at £119,000, the gap between the most expensive and cheapest regions is at a new record of just under £330,000. That said, in a sign that April’s stamp duty changes have perhaps taken some heat out of the London market, prices were unchanged in the second quarter following a 7.2% rise in the previous quarter, although they remained well up on a year earlier at 14.6%. Along with the South East with growth of 13.9%, house price inflation in London was the strongest seen in the UK. Outside of these two regions, no others recorded double digit house price rises with most registering considerable slowdowns compared to the previous quarter. In Scotland prices fell 1.6% and were down by 0.6% in Wales while the rate of growth in Northern Ireland fell sharply to just 3.5%. Moreover, house prices in Northern Ireland are still some 48% down on their peak seen in the second quarter of 2007. Indeed, in Wales prices remain close to 10% down on pre-financial crisis levels and Scotland some 6.4% down. Other regions currently recording house price levels below pre-financial crisis highs include the North down 6.9% and the North West down 2.5%. ‘The UK housing market showed signs of cooling in the spring, with the annual rate of inflation slowing to 8.5%. Although average prices moved 1.8% higher than the first quarter, only six of the 12 UK regions saw house prices rise in the three months to June, with prices falling in five regions and stagnating in London,’ said Chris Williamson, chief economist at Markit. ‘This is the first time that prices have failed to rise in London since late 2012. The… Continue reading
Latest data reveals home building boom in New Zealand
Residential and building construction along with infrastructure has reached a new all-time high in New Zealand, reaching $17.8 billion, new figures show. The building consent data from Statistics New Zealand reveals that 28,387 homes were consented in the past year, the highest number in 11 years, and the 9,434 consented in Auckland is continuing the strong growth over the past four years. The 732 for May is also the highest in 11 years. The growth in Auckland for the residential construction centre was 26%, a total of $4.3 billion, and is about as fast as a sector can grow, according to Nick Smith, Building and Housing Minister. He pointed out that this is treble the rate of $1.4 billion since his party came to office and the growth has been particularly dramatic in the past few years, since the Government entered into a Housing Accord with Auckland Council. ‘The construction sector is booming, with strong residential and commercial building activity across the country. The level of residential building activity in Auckland of $4.3 billion and nationwide of $11.4 billion is an all-time high in actual and inflation-adjusted terms,’ he explained. ‘This continues the longest and strongest period of growth in residential construction in New Zealand history. We are on track for 85,000 new homes to be built nationwide in this term of Parliament, up from 60,000 last term. Auckland is heading for an all-time record of 36,000 homes, the largest in any Parliamentary term,’ he added. ‘This record investment in residential construction is welcome because supply is the most important answer to New Zealand’s housing challenges. The Government is working on further initiatives to ensure this growth is maintained,’ he concluded. Continue reading
Pace of rental growth in UK slowing
Rents across the UK continued to rise during June, but the first half of 2016 has been characterised by a slowing in the pace of rental increases, the latest rental index shows. Rents agreed on new tenancies across the UK, excluding London, increased by 3.5% in the second quarter to £773 per month compared to a year ago and by 3.9% to £1,575 in London over the same period. However, this is down compared to the UK wide figure for May which was 4.4% and 6.2% for London, according to the data from the June HomeLet rental index. Rents continue to rise in almost every area of the country, with 10 out of the 12 regions surveyed seeing an increase over the three months to the end of May. The index report says that the more modest rental increases seen in June are a continuation of a trend that has developed throughout the first half of the year, with rents rising across much of the UK each month, but at a slower pace than was the case throughout most of 2015. Last June rents were rising at an annual rate of 7.8% and 10.1% in London. The data suggests the private rental sector has responded to the needs and concerns of landlords and tenants alike during the first half of the year. Landlords were hit by higher stamp duty charges on purchases of new property in April, which led to a rush to complete transactions before then and a spike in the supply of rental property thereafter. Meanwhile, tenant demand for property has remained strong, particularly given rising house prices and squeezed mortgage availability, and projected growth in the UK’s population suggests this will continue, the report points out. It explains that official projections suggesting this growth will come from both the British born population and net migration. Nevertheless, the slowing in the pace of rental increases may reflect landlords’ recognition that an affordability ceiling is approaching. The outlook for the sector will depend in part on the fall-out from the UK’s decision to leave the European Union in June’s referendum. Some economists expect the referendum result to act as a brake on construction in the housing sector, which could exacerbate the current imbalance between demand and supply in the rental market. It is also possible that demand may increase as would be house buyers opt to wait and see how house prices are affected over the next 12 months and beyond. HomeLet’s data also suggests that the average length of a tenancy, as measured by how long tenants had occupied their previous rental property, has begun to come down over the past three months. The figures underline the important role that the private rental sector plays in providing a wide range of housing options to those who have not purchased a property. According to Martin Totty, chief executive… Continue reading
